Q1 26/27

Aug 7, 2026

Summary

Q1 earnings reflected weak volumes but improved sequential margins, supported by cost and inventory actions. Management expects H2 recovery and is investing in valves, coatings and adjacent businesses as public water infrastructure spending accelerates.

Now on the conference over to Mr. Neil Kenya from EY LLP. Thank you and over to you, sir. Thank you, Steve. Good afternoon, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's Q1 FY 2027 earnings conference call. To discuss the performance of the company, we have with us from the management team, Mr. Madhav Kejriwal, Whole-time Director, Mr. Sunil Katial, Whole-time Director and CEO, Mr. Rajesh Daga, CFO, and Mr. Gaurav Somani, General Manager, Finance. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain some forward-looking statements that are subject to various risks, uncertainties, and other factors which would be beyond management's control. We kindly request to bear in mind that there might be some uncertainty while interpreting such statements. We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I will now hand over the conference call to Madhav, sir, for his opening remarks. Thank you, and over to you, sir. Thank you, Neil. Very good evening, everyone, and thank you for joining us for Electrosteel Castings Q1 FY 2027 earnings conference call. I would like to thank all the stakeholders for their continued trust and support in us. Over the past few quarters, the ductile iron pipe industry has operated in a challenging environment due to slower project execution, delayed fund disbursements, and liquidity constraints at the state and municipal levels. While the external demand environment remained challenging, we stayed focused on what was within our control. During this year, we implemented a broad-based structural cost optimization program across our operations, strengthening operating efficiencies, and creating a more competitive cost base that will support profitability and operating leverage as volumes recover. We are encouraged by the approval of Jal Jeevan Mission 2.0 with the enhanced outlay of INR 8.69 lakh crores, including the central government support of INR 3.59 lakh crores, increased from the erstwhile INR 2.08 lakh crores. Alongside the continued focus on AMRUT 2.0, irrigation, and the river linking projects, this provides a strong long-term visibility for the water infrastructure investment. The irrigation sector continues to present significant opportunities, with several states increasingly adopting piped irrigation systems to improve water efficiency and reduce transmission losses. In case of river linking projects, we are hopeful to see demand coming in from the Ken-Betwa project, involving a total project cost of INR 44,000 crores and the Parbati-Kalisindh-Chambal link project between Madhya Pradesh and Rajasthan, which is also expected to commence shortly, with project value being around INR 90,000 crores. There are many other such schemes upcoming which are expected to benefit the ductile iron pipe industry in the long term. One such is the Urban Challenge Fund with a total investment of INR 4 lakh crores to address the rapid urbanization of our country. Further momentum is expected from the recently approved Modernization of Command Area Development and Water Management, or in short, M-CADWM scheme, with an initial outlay of INR 1,300 crores for the modernization of irrigation water distribution systems through underground pressurized pipeline networks. Higher budgetary allocations and faster fund releases are expected to improve execution momentum, particularly in H2FY27. Our subsidies in the overseas markets such as U.K., Europe, and the U.S.A. have also been doing much better than our expectations, which is evident from our consolidated performance. We continue to deepen our presence in these countries alongside increasing the market in Africa and Southeast Asia. We are also strengthening our position across the water infrastructure value chain through the acquisition of T.I.S. Services S.p.A., Italy. This has expanded our product portfolio and enabled us to offer integrated water transmission solutions and also helps us further strengthen our global presence. During the quarter, T.I.S. delivered EUR 10 million in revenue, representing a sequential growth of 18.4% over the previous quarter, with EBITDA margins improving to the mid-teens. The business continues to perform in line with our expectations. We also expect our valve manufacturing facility in India to commence operations by the end of this financial year, supporting future growth and improving profitability. As we mentioned in the last call, our target is to double revenue from valve segment in the next four years, and we are on track to achieve the same. Taking a cue off the water infra space, as a part of our diversification strategy, we are entering the industrial paints and protective coatings business, leveraging our existing expertise in the paint manufacturing used on our pipes. We will initially focus on high-value industrial and protective coatings and scale this business through phased investments. We aim to establish a meaningful presence in this segment and target annual revenues of around INR 800 crores-INR 1,000 crores in the next five years. To support this growth, we plan to incur CapEx in a phased manner of around INR 250 crore to INR 300 crore. Despite the challenging operating environment, our balance sheet remains strong, providing the financial flexibility to pursue growth opportunities while also maintaining a prudent capital structure. With that, I would like to now hand over the call to Mr. Rajesh Daga, CFO, who has recently taken over from Mr. Ashutosh Agarwal. Mr. Daga has been with us at Electrosteel since 1989. Throughout his tenure, he has held key positions across diverse functions, including finance, accounts, purchase, and sales. He will take you through the operational and financial performance of the quarter in greater detail. Thank you. Thank you, Madhav Kejariwal. Good afternoon, everyone, and thank you for joining us. It is a privilege to address you for the first time as the CFO of the company. Let me begin by introducing myself. I am Rajesh Daga, a qualified chartered accountant. I joined Electrosteel Castings in 1989, immediately after qualifying as a CA, and it has been my privilege to be associated with the company over three decades. Over the years, I have had the opportunity to serve the organization in a variety of roles across different functions, making this a truly enriching and rewarding journey. Before taking over as a CFO, I headed the company's domestic marketing function for the past 25 years, which gave me a valuable insight into our business, customer, and industry. Before I proceed further, I would like to acknowledge the outstanding contribution of my predecessor, Mr. Ashutosh Agarwal, whose financial leadership, discipline, and strategic guidance have played a significant role in strengthening the company's financial position and governance standard. With this, I would now like to take you all through the performance of Q1 of FY 2026-2027. Sales volume of DI pipes and fittings and CI pipes during the first quarter stood at 1.20 lakh ton, down by 27% year-to-year. The decline in volumes is going to slow down primarily in the domestic market. This quarter, volumes in export market too was impacted due to Middle East tensions. At consolidated level, gross debt and net debt as on June 30, 2026 stood at INR 1,658 crore and INR 876 crore respectively. During the last financial year, the net debt has reduced by nearly INR 1,108 crore, and we are focusing on optimization utilization of the funds. I will now take you through the consolidated results of Q1 of FY 2026-2027. Total income stood at INR 1,465 crore. Sales volume was lower on year-on-year, primarily due to reduced sales volumes. EBITDA stood at INR 139 crore with an EBITDA margin of 9.5%. PAT stood at INR 48.4 crore. Moving to the standalone results for Q1 FY 2026-2027, total income stood at INR 1,119 crore, lower on year by 21%, mainly due to lower sales volumes. EBITDA, including other income, stood at INR 70.60 crore with EBITDA margin of 6.3%. PAT stood at INR 5.9 crore. While past few quarters remain challenging due to softer domestic demand, we believe with the government positive steps towards water infrastructure space, the long-term outlook for DI pipe sector continues to remain strong. Central government has allocated INR 67,670 crore towards JJM in the Union Budget for FY 2027. Out of this, approximately INR 10,344 crore has already been sanctioned to various states during the current financial year till date, compared to a meager INR 1,560 crore released under JJM in previous financial year. Going forward, we remain focused on operational efficiency, strengthening the balance sheet, maintaining financial discipline, and remaining well positioned to benefit from a recovery in the domestic market. With this, I would now like to open the floor for the question and answer session. Thank you. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Shutesh Rumkar with ICICI Securities. Please go ahead. Hello. Am I audible? Yes, sir. Yes. Thank you for the opportunity. Sir, my first question is regarding the Jal Jeevan Mission 2.0. So recently, around INR 6,000 crores have been sanctioned. So how much of it is translating into orders for us? Sir, sanctioned amount is around INR 10,000 crores, INR 6,000 is what is released. The rest of the INR 4,000 will also release soon enough. We are seeing an increase in the sentiment in the market with customers approaching for order booking more and more. These are going largely till now towards money spent by states already to the customers. It is difficult to establish exactly what quantity has gone into order book directly to us. But in the next month or two, we are finding that speed of order booking is going to pick up substantially. Okay. Thank you, sir. My second question is about the imports. The Saudi government has put duties on DI pipe imports. So is there any impact on us? Sir, the total sales of Electrosteel to Saudi Arabia was to a total of, it is about 2%-3% of our sales. That is a quantity that can be diverted to other markets pretty easily. It is not going to be such a problem. If you see the details, Electrosteel has had an anti-dumping duty of 17%, and other manufacturers from India have had a dumping of 30%. In fact, we do not see that a major chunk of our export to Saudi will go down because of this, and the small quantity that will also will be very easily diverted to other GCC countries and Africa. Can you put it into figures like how much room would be impacted? Sir, there is no fixed figure of sale year-on-year to Saudi Arabia. As I mentioned, it was approximately 2%-3% of our total sales. This quantity, I am assuming, will be down to 1.5%. So the 1%-1.5% that we will lose out, that we can very easily divert to other markets. Okay. Thank you, sir. Thank you. The next question comes from the line of Anand Darshan with 361 Capital Market. Please go ahead. Good evening, sir. Thanks for the opportunity. Sir, I just want to know what is our estimated DI pipes volumes for this year, sir. Sir, we had erstwhile indicated the volume of, I think, 650,000 to 700,000 tons, but due to the slower initial release of JJM, we are expecting to reach a quantity of around 575,000 tons. 575,000 tons for the year, sir. Yes, please. Right. Sir, what is the export volumes we had in FY 2026 and what are we expecting in 2027, sir? Which region are we focusing on in that? So far we've done around 21,000 tons export. We are hoping that For the current quarter, sir? For the current quarter, yes. We are expecting that at the end of the year, we will be exporting around between 22%-25% of our total volumes. Sure. Okay, sir. Which region are we focusing, sir? Europe, the U.K. have been our strong markets ever since we started exporting. Around 60%-70% of our exports are focused on the Western markets. The remaining 40% is to the Middle East, Africa, and we recently also started expanding into the Southeast Asian markets. Sure. Right. Sir, can you give me the breakup of pig iron volumes for the quarter, sir? We are only operating at 50% utilization, so still we report an AKG every quarter. What led to this improvement, sir? Sir, as mentioned in the opening speech, owing to the situation of demand, there's a famous saying, "When the going gets hard, the hard get going." We decided that- Right we need to roll up our sleeves and figure out how to make ends meet. The team has taken up great initiatives to cut costs, to moderate inventory. This is a cumulative effort of the entire Electrosteel team to keep the head above the water. How I see this helping us in the future is that we are going to come out of this situation even stronger to maximize on the opportunity ahead of us for the next 2 to 3 years. Right. Sir, can you give me the breakup of pig iron volumes for the quarter, sir? If I am not mistaken, sir, pig iron was approximately 45,000 tonnes. 45,000 tonnes. Okay, sir. Sir, my last question regarding that valve business. We are planning to shift that production to India. With lean manufacturing cost system in India, what growth are we expecting from FY 2028, sir? Sir, I wouldn't call it shifting of manufacturing to India. There are certain high-value products that are being made in Italy as on date, which will continue to be made there. We will shift a certain percentage and then double down on the total production volumes. I would say going forward, we are looking at the Asian subcontinent to contribute to around 40%-45% of the total business, and the Western countries will still contribute to 55%, maybe even 60%. This is the outlook that we have over the next three to four years, please. Mm-hmm. Done, sir. Thanks, sir. That's very much it. Yeah. Thank you. Thank you. The next question comes from the line of Aniket Kelle. Please go ahead. Mr. Nachiket, your line has been unmuted. Please go ahead with your question. Yes, hi, good afternoon, sir. The new presentation is very impactful. Thanks for the updated presentation. My question is on the planned industrial paints expansion. We are almost increasing our capacity 4x. So what is the status, and could you tell some timeline on it? Sir, initial investment will be to the tune of INR 100 crores, wherein we will add capacity by 17,000 kiloliters. We already have a small facility on which we will have to do a brownfield expansion in Western Ghats. So that allows us a quicker return on investment, and it will also allow us to better learn the nitty-gritties of the business. Right. We are very certain about the demand of the products that we are tackling. We are looking at getting into, as mentioned, largely protective coatings for industrial purposes and also structural railways, et cetera. Right. That's the current plan. The long-term vision is to take it up to around INR 1,000 crores in revenue with an outlay of close to INR 300 crores. Capital outlay of INR 300 crores. Yeah, got it. Could you tell some timeline on it as to how many years that would take? Between four to five years, please. Okay. Phase-wise, say first two, three years, what would be the first branch which comes online? Sir, you can say that the first two years will be a little slower, so maybe we go up to around INR 250 crores to INR 300 crores in the first two years, post which we will see this number practically doubling every year. It will go from INR 300 crores to between INR 500 crores to INR 600 crores and then INR 600 crores to between INR 800 crores and INR 1,000 crores. Okay. That is why the 4-5 year timeline. The first couple of years will be a little slower. Yeah. You order the equipment, it comes, you start moving. Got it. All these things, the leading period, basically. I am just trying to understand, when would be the first commercial production from the capacity expansion? Commercial production post, I think Q1 next FY, you can start seeing the impact of the diversification in the books, albeit small, but you will start seeing that. Okay. So as soon as next Q. Q1 next year. Yes, please. Okay. Got it. Thank you, sir. I'll get back. Thank you. Thank you. The next question comes from the line of Sajid Mi with Green Portfolio. Please go ahead. Yeah, hi. Am I audible? Yes, please. Yeah. It is Sajid Mi from Green Portfolio. My first question is regarding the DI pipe realizations. Sir, what was the total realization in Q1 FY 2027, and if you can tell me about the QoQ and YoY trend also. So FYQ4, these are realizations of around INR 50,500 for Q4, and in Q1 this is around INR 55,000, please. On revenue, this will be around, you can say around INR 62,000 per ton. The patterns regarding the DI pipes realizations are firming. Can we say they are bottoming? I'm sorry, I couldn't hear you very clearly. The pattern? The trends. What you anticipate regarding the DI pipes prices. Sir, of course, as you might have seen, the last one and a half years has been extremely muted, especially the last particular financial year was probably rock bottom for the industry. Since it has been there since 1994, I think, at least from my understanding, it is the worst year ductile iron has seen in India. This is rock bottom. Yeah. Okay. Understood, sir. The second question is regarding the order book. Basically, I just want to know what is the current executable order book we have, and which states are the most active in tendering under JJM 2.0? We have a total order book of around 3 lakh tons, which works out to around 5 months. Okay. Yeah. This order book, JJM would be around close to 3%. Which states are the most active and which states are showing good reaction? Sir, state-wise, Odisha, Andhra Pradesh are the ones which are doing well. Kerala and Tamil Nadu are also there. U.P. and Rajasthan now with the JJM 2.0 will also pick up reasonably well. Okay. Sir, we expect that H2FY27 and the fund release will be much better. What we could con- I am sorry. Hello? Yes, sir. The current participant has disconnected. We will move on to the next question. It is from the line of Dhruv Joglekar with MNCL. Please go ahead. Hi. Thanks for the question. Am I audible? Yes, please. Hello. Yeah. So a couple of clarifications actually on the volume side. So this financial year in FY 2026, we had a volume of roughly 5.5 million tons. And we are expecting the next year also to be in the similar lines. Earlier the guidance was about 7. Now, I think in the initial comments, we mentioned 5.5. In spite of the fact that the JJM spend is going up from INR 1,500 crore to almost INR 70,000. So let's assume 50% of it is actually consumed out of the INR 70,000. Even then it is a significant rise. So what is actually I'm seeing something on this, I just wanted to understand that. So sir, the reason for the slightly muted numbers is because the first half is substantially slower. The growth will really come in in H2. Last year it was kind of the reverse, where H1 still had some leftover demand from JJM, which the states were mostly carrying. Then closer to the beginning of H2, they also ran out of steam. That is one of the reasons, and I think going forward, we are expecting that it takes a little time to restart and get back onto the production levels at peak. It takes around a month or two for that to happen as well, so that will give us a bit of a delay. Just to give you reference, in Q1 last financial year, we made around 1.8 lakh tons, against which this year we've got to around 1 lakh, 1.10 lakh tons. This is causing a bit of delay. Is it fair to say that if the 70,000 gets consumed in this year, then the coming Q4 and the coming Q1 will be significantly boost? Absolutely. Okay. Yes, Dhruv. Does that answer your question? Yeah. Thanks. Thank you. The next question comes from the line of Sharatchand Maloo with JNTU Capital. Please go ahead. Hi. Thanks a lot for the opportunity. Just few quick questions. Firstly, on the T.I.S. Services, what kind of revenue and PAT was there in Q1 FY 2027? Sorry, what kind of revenue? EBITDA and PAT out there from the our paint facility that you have acquired. The revenue from T.I.S. was close to EUR 10 million. Okay. The EBITDA margin was around 13%. For the first quarter. The PAT level, sir? PAT was around 7%. Sorry? Just give us a quick second. PAT would be close to around 7%. Yeah. 7%. Going forward in FY 2028 or in FY 2020, how much are we expecting? By the end of this financial year, we are expecting, as mentioned, it was going to be 20% above last year's average of around 38 million. Okay. Hopefully we will reach a number of 42-45 million in revenue with an EBITDA margin of similarly the 14%-15% level with the PAT of 8% or so. Good, sir. And sir, on the debt repayment, any plans for the debt repayment going forward? Any plans for? Debt repayment going forward in FY 2027. Our term debt right now stands at around INR 340 crores, which will eventually go down to around INR 230 crores with the scheduled repayments that we have. As we mentioned initially in the call, last year, we had seen substantial debt reduction of around INR 1,100 crores. The debt reduction is a continuous process which is happening. Working capital debt will depend a lot on the working capital movements. On the business volume. On the business volume. Got it, sir. That is all my questions. Thank you. Thank you. The next question comes from the line of Arun Chulani with First Water Capital. Please go ahead. Thank you for the opportunity. Listening to the other DI players, they were not that excited even going forward. They said they are either pausing or they are looking to export, but they were not very gung-ho with the actual states or the government actually putting play, given the situation on, let us say, energy inflation and having to counter that. What are your thoughts there? Is it just binary a wait and see, or are you actually seeing on the ground traction by states or the government? I'll give you two reasons that back up the thoughts that we have. First and foremost, within the first quarter itself, we've seen 5X the capital outlay from the center as opposed to what was there in, say, the last 10 days of the previous entire financial year. Being very frank, the election of 2029 is going to be very critical for the center, and they will have to finish this before that. So I'm fairly certain that the targets that they have to complete this project, I think end FY 2028, they will put all efforts to make it happen, and this would be a priority exercise for them. Got it. Thank you. But nothing as yet. You said the last 10 days there was 5X the capital, but what do you mean by that? You mean 5X the orders or 5X the payments? Because part of the issue was they weren't paying, but are you seeing that they're paying now? I'll clarify what I meant. What I meant was the amount of money they have spent in the entirety of last year, and that too, they spent that only in the last 10 days of the last year. They have already spent five or 6X of it this financial year. And we are just in the third, fourth month. Got it. I can see the wheels churning faster and faster and faster. Got it. Okay. Thank you. Thank you. The next question comes from the line of Kunal Gandhi with Yashwi Securities. Please go ahead. Kunal Gandhi. Yeah. So I would like to ask. Yeah, hello. Yeah. My question is pertaining to the INR 10,000 crore orders already sanctioned by the government. Out of that, which would be our participatory states and what would be our chunk of the pie? For the remaining INR 50,000-INR 55,000 odd crores, what is the revenue visibility that we see for us in FY 2027 to close on an annual run rate? We can say that approximately from Jal Jeevan Mission, we will be getting close to probably 12%-13% of this outlay. Okay. This is for the existing orders? For Jal Jeevan Mission, when you say existing order, can you elaborate a little on that, please? On the INR 10,000 crores already sanctioned, we would be having a 12%-13% market share there. On the incremental orders that are yet to be sanctioned, there also we can see a similar rate. Yes, this is for the ductile iron industry as a whole, please. Okay. Yes. Thank you. Thank you. The next question comes from the line of Rajesh Bhandari with Nakoda Engineers. Please go ahead. Good afternoon, sir. You were talking about the industrial paint unit that we are putting up. Are we having any collaboration or it is in-house R&D? Sir, we already had a team working on making paints that are used for our pipes, especially those lining and coatings that we were using for our export division. And we do a little bit of R&D ourselves so that we can stay a little ahead of the market. That team for the first phase of investment that we are doing, the markets that we want to enter, that team has the capability for it already. In fact, we've already made some headwinds in that front. So for the first phase, we are looking at going independently, and so far I'm quite optimistic because we are seeing good results. Sir, in this have any anti-rust paint been included for industrial application? Yes, please. No, anti-rust. What I am exactly trying to say is, Tata Chemical Tridha. It is very close to the sea. Right. So the rusting that happens there, every six months to one year, they have to get the paint changed, and it is a specialized paint. Are you planning for any anti-rust special paint also? So sir, there are some protective coating and primer layers that are used for angles, channels, and other such structurals. Right. This is a target market for us. And marine also, we are subsequently planning. Yeah, exactly. What I meant was marine application. Yeah, I have understood. That also is there in the plan. And we have a specialization on this, or we intend to have any collaboration? Sir, the marine aspect will be taken up in phase 2, say, starting- Okay. -within the next financial year. Yeah. At that time, we will weigh our options and take a call. Sir, about your pumps, big pumps. Valves. Have we secured any orders in India? Sir, valves, not pumps. Not much. Are we approved for nuclear power application? Sir, I meant we are doing valves, not pumps, please. No, sir. Your big pumps. Sir, valves, sir. Not pumps. Oh, not pumps. Okay. I am sorry. It is for valves. Are we approved for nuclear power application also? We are not approved for nuclear power plants as yet. We have approval for small-scale hydropower plants. We are in the process of developing the specific kind of valve required to cater to both large-scale hydropower plants and also nuclear power plants. Yeah. Nuclear power plant till 2047 is going to be about 100 gigawatts, sir. 100 gigawatts, I'm sorry. Right. The scope will be huge. Yes, sir. Sir, your next 2 to 3 years, what are the prospects, sir? For? For the company. Next 2 to 3 years. Sir, at the moment, the next 2 to 3 years, we will be able to ride the coattails of the expenditures on Jal Jeevan Mission, along with the increased expenditures towards irrigation, because we are slowly realizing that this way of canal irrigation that we've been following in the country is not sustainable. Parallel to that, increase in expansion in the valve business and also paints. This will give us a good diversification and bring down our dependence on DI pipes. From today, it's around 85%. In the next four to five years, it will go to around 55% or so. We are also looking at expanding our secondary product line, sir. We are a small size there in the ferroalloy business. Yeah. We are seeing that there is scope to increase capacities there as well. When can we reach our past glory? H2 say you will start seeing improvement in the financials quite a bit. Okay. And sir, the balance of the INR 1,200 crores, have we received? Of coal mines. Your coal mines. Sir, as we discussed, all the numbers that have been approved by the ministry so far are close to in line, maybe 5%-10% different from what we have assumed. But, as we evaluate every asset, it is increasing. It will take time. And we have not received any money? We have received around INR 98 crores so far, sir. Oh. My God. Okay. Fine. Thank you, sir. The next question comes from the line of Koushik with Vermillion Value Management. Please go ahead. Yeah, good afternoon. I have been a shareholder of Electrosteel for the last maybe 10, 12 years. My questions are more on long-term, what you are thinking. My question is that, in your slide, you have one slide on the irrigation projects. What kind of sales do you expect to get from this in terms of how these translate into orders for us? I would say that around 5%-7% of these project volumes are going to tantamount into ductile iron pipes. You are absolutely correct. The government has around 30 DPR prepared for river linking. Right. Of which 3 of them are particularly moving forward at good pace. In fact, work on Ken-Betwa has also started. If that is going to materialize, I am very certain. There is another one between Madhya Pradesh and Rajasthan, PKC. Yes. That is also moving forward. That's a big project of INR 90,000 crores. These are going to slowly take over the reduction of demand that will happen from more and more JJM work being executed. We are very hopeful, although it will not make up entirely for the JJM demand, but just towards irrigation, we'll definitely overlap a bit of the JJM demand that will reduce with time over the next 2 and a half years. Right. In earlier calls, one of your colleagues had mentioned that even in the areas where already pipes were there, now we are suddenly increasing the FSI from 2 to 5, 10, et cetera, based on transit-oriented demand. Do you see demand coming from already areas which are there? I mean, the urban areas are being rethought and completely replanned. Do you see people rip out what is there and rebuild because now the demand may be 4x, 5x? That is definitely happening, sir. That's why this Urban Challenge Fund that has come up, it's a INR 4 lakh crore fund. That is not only pertaining to water, that is an overall improvement in urbanization of tier 2, tier 3 cities. It's somewhat like an AMRUT 3.0, you can say. A part of that will of course, go into improvement of water infrastructure, recycling of water, and a circular economy for water. Right. Definitely, we will see pickup of demand from that as well. In terms of your debt position, it is quite comfortable now and due to this last FY 2026, the government scaling back, the valuations have come down, et cetera. Do you see an opportunity to do a tactical buyback? Now this buyback, the taxation also has kind of changed. Do you see this as an opportunity or a window for doing a buyback? Sir, I do not think it is the right place to comment on this. I would like to go through the correct channels of communication if something like this is finalized at any point. Okay. From my point, I have been in the market for 30 years, so I think that you should consider this. It is an opportunity. I have been an investor also for almost a decade. So I think even for the vast distance the company has covered and it comes with a very solid base. I do not think the market is giving you the kind of valuation that you should get. So I would request you to look at this in a very thorough manner. It's been something on our minds, and we are definitely going to further look into it. Thank you very much for your suggestions. We will definitely take it up with the larger management team of Electrosteel. One other question I had is that AMRUT 2.0, does the wastewater recycling and desalination, all the projects come under this, or this only covers a portion of the projects? Sir, part of it. There are some independent exercises being taken up as well for the same exercise. Certain cities required more. Delhi is doing a lot independent of AMRUT for independent STPs et cetera. So there are overlaps in the projects coming under AMRUT and other urbanization efforts. But again, some of those overlaps are falling under the UCF as well. Okay. Can you also just throw some light on what are your thought processes and how the company will look in 2030? Because you have now started some diversification, et cetera, and new initiatives. So what is the thought process, and how do you visualize the company after five, six years? So, sir, if you look at a moderation, I am saying not extremities, but a moderation in the DI pipe industry back to its older days. Let's get rid of the 2, 3 years post-COVID, where we had an extremely good run. Yes. Without that in the picture, I am very certain that we can look at a growth of revenue to around INR 7,000-INR 8,000 crores with an EBITDA level of 13.5% by FY 2030, FY 2031. Okay. And these businesses that you are looking at, the valves, the paints, et cetera, ideally, what type of growth or market, I am not talking about turnover, what type of activities you have planned out in this period? So, sir, the industrial and protective coatings market is set to grow at a rate of 10% annually year-on-year in India. We are hoping that we will be able to do a little better than the markets. For valves, we were expecting a 20% plus growth rate year-on-year owing to the availability of the entire Electrosteel ecosystem now available to sell the valves. And quarter 1 so far, we are seeing that growth happen. We are seeing an 18% growth on top of last year's Q1 growth rate. So, we are fairly certain that we will be able to maintain this target and for valves from an area of close to INR 400 crores of revenue. In the next four years, we are expecting to double this. Paints, we are even more aggressive where so far we have only been manufacturing for internal consumption, but we expect to go out into the market and get around INR 800 crore-INR 1,000 crore of revenue. This would include hopefully some inorganic growth also. Right. What is the right to win, or in your assessment, what gives you this opportunity? Because going outside is a new business. For valves, I would not say it is a new business at all, sir. It is the same market. Yeah, I meant for the paints. So- Paints and coatings. What put the seed in our mind is that we already had a team which is doing R&D. Been able to achieve quite a few things in terms of import substitution for linings and coatings on our pipes. Beyond that, what happened is that we appointed consultants. We had Alvarez & Marsal consult us on how we can utilize our existing infrastructure. Right. Our assets, both in terms of human capital and also in terms of plant and machinery, to diversify and grow. That gave us the idea that the industrial paints is the way to go. We have engaged with experts in the field to identify the right products to enter the market with, and then what should be the next step and the step after that. We are going through this with a great deal of pre-exercise with experts and consultants. We are fairly sure that we will be able to achieve these numbers. Post the West Bengal change in the general scenario there, are you looking at investing in West Bengal now? The first phase of investment that we are going to be doing in our paint facility is going to be in West Bengal. Albeit small, it is a start. The valve business also, the valve plant in India, the first phase also we are looking at investing in Bengal itself. Right. That is also because we have fixed assets there, so the capital outlay will be lesser as opposed to if we were doing a pure greenfield. Right. Those assets are there. I would say all in all, we are looking at spending close to INR 200 crores in West Bengal Right in the next year or so. So this ferroalloy also, are you looking at West Bengal? Because one of the things we heard Yes as analysts is that the entry barrier in the ferroalloy business was doing business in West Bengal, not really the technology or anything. And so that gave a lot of returns to the existing players, and there was a little feeling that there is space for more players. You are very right, sir. Our expansion in ferroalloy is also going to be in our existing unit. We already have one ferroalloy plant, and we have found that with certain investments, we can utilize additional energy, et cetera, to put up another plant right next to it. So that is what we are doing. Right. So it is going to be like a brownfield? Yes, it is. For the next two years, all the expansions that we have planned from a capital utilization perspective are all brownfield, and they are mostly to diversify our portfolio from ductile iron pipes to other products. You will see alongside that, we are making investments towards improving our cost efficiency, our inventory management, and towards digitalization and automation within the ductile iron pipe part to make us more competitive and prepare us for the future, where we know that probably the demand-supply scenario will become a little more strained again. Right. You had looked at Orissa for a greenfield site. Any update on that? Sir, because of the downfall in the market, we realized that it's better to hold back and utilize this CapEx for these more efficient brownfield expansions. Right To work on efficiency rather than just expansion and capacity. Do you have good opportunities for bolt-on acquisition? You have done a valve company, you have done a services company in Singapore. Do you see opportunity to do things allied around your adjacencies, which are very low risk but very value accretive? More of them Sir, we have around INR 700 crores of capital, sir, on our books. Right. Which we are ready to invest. If some opportunity comes, we will be more than happy to look at it. Of course, it is always best to expand within your adjacency. Right. That is our first priority. Beyond that, as and when we are coming across some opportunities, we will study and see how to utilize our capital to maximize returns for the company and our shareholders. My last question, you had mentioned three- Mr. Koushik, I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Jyoti Saju with Kirtan Capital. Please go ahead. Hello. Am I audible? Yes, sir. Yeah. Most of my questions already got answered, but still on the paint and coating business, in Q4 call, you have guided for INR 600 crore top-line target in five years. In the Q1 presentation now, that target has raised to INR 800 crore to INR 1,000 crore for the same period. I just want to understand what led to this growth in the guidance. Has company already secured any external customers in this division? Sir, I would say, as I was mentioning, we were engaging with consultants and experts at that point also. You can say we have started doing dipstick tests into the market, and we have found that there is scope for even more than what we had projected. Plus, our appetite for diversification has increased. So our capital outlay has gone from INR 100 crore to INR 250 crore to INR 300 crore, which allows us for growing faster. We are also looking at inorganic opportunities. We are in the market to see if there are some possibilities for technology tie-ups or acquisitions in this particular field. We are engaging with certain consultants and experts for that as well, and hopefully we will find something in the next two years which will help us grow from the INR 600 crore target to the now INR 800 crore to INR 1,000 crore level. Okay, got it. Also, on the newly approved railway rubber components, do we need to get approved by the government authorities to sell these products? Do we already have such approvals in place? No. In fact, for this today in the board meeting, we have taken approvals. The Indian Railways wanted those board approvals for that. So possibly it will take four to six months time for us to get it registered. Okay. Do we need CapEx in this specific segment, or are we using the same capacity for selling these products? Bulk of the equipment is the same. Some additional equipment are required, for which we have already taken procurement steps. They are under installation now. In the next three months, we are expecting those to be installed. Okay. Okay, sir. Thank you. That is from my side. Thank you. Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead. Yeah. Namaskar, Madhav ji. I hope my voice is audible. Namaskar, sir. Sir, first of all, thank you for a very good interactive session. But just before starting to comment anything, first point which would like to reiterate is the investor presentation that has been revamped, and a lot of effort has gone into it. So kudos to the team, and we hope we maintain the same. Sir, I have a small suggestion pertaining to the T.I.S. part. If we can also provide some financial and operational input for the T.I.S. also in the presentation itself, the questions could be answered there itself. That is the first understanding. Second, I think you mentioned about DIP volume of 5.75 for this year, or it is DIP plus the fittings number? No, sir. This is DIP plus CIP that we will get to this number approximately. Okay. And the comparable number last Yes. Yeah, please. Comparable number last year was close to the same, sir. So I would say in terms of volumes, we will be close to the same numbers. But we expect better revenue and better margins per ton due to the efforts that the entire team has made over the last 6, 8 months to reduce costs, to improve efficiencies, and really good job on the inventory management part. Okay. Sir, can you just give us some more light on how the EBITDA margin trajectory would be shaping up from the current 9.5 number? We will exit the years at 12%-13%? A fair understanding. So sir, if you see the EBITDA margin this year, this quarter, it was around 9.8%, and for the previous quarter Console 9.5. Okay, 9.5 is already done. 9.5. The EBITDA margin is around 9.5 for this quarter, and for the previous quarter, it was around 6.5%. There is an improvement in that itself, although the revenues are somewhat the same. Going forward, I think Q3, Q4, we should be hitting EBITDA number of 12% to 13%. Okay. Quarter 2 will be similar in terms of deliverables and margin than what we have expected Q1? Approximately, sir. I am hoping we can do better, but conservatively speaking, we won't do worse than where we are today. Okay. Sir, point number 4, outcome of meeting, you have mentioned that we have approved the manufacture of various rubber products for Indian Railways. Sir, please give some more information on this. What exactly are we trying? You have also mentioned about our gasket plant, I think, in Andhra Pradesh. How are we interconnecting these two aspects, and what is the revenue potential? What are you trying to convert here? In this gasket plant, there is a possibility of doing some additional production, but with some added machines. What's happening is that this plant primarily was set up for meeting our captive requirement of gaskets. Because of this dip in the DI pipe market, though temporary, we saw it as an opportunity that we can add to the portfolio. We are in the process of procurement of the additional few equipment which are required so that we can also start supplying to the railways. Meanwhile, today, we have taken the approval of the Board of Directors for adding this new product category into our portfolio, and with that, we will go ahead with the registration, et cetera, with the railways, which may take around 4-6 months' time. Right. That is how we are planning to go ahead. Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you for joining us today, everybody, and for your continued interest in our company. We would like to reassure you that we remain focused on improving our operational performance and strengthening our financial position while creating long-term value for all our stakeholders. We appreciate your continued confidence in our management and look forward to interacting with you again after next quarter's results. Thank you, and have a good weekend. Thank you. On behalf of Electrosteel Castings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.